Social Media Advertising Regulatory Frameworks & Compliance 5

Question 1

A brand's ad on TikTok is flagged for promoting a multi-level marketing scheme. Which policy framework most likely triggered the removal?

Accepted Answer

TikTok's Misleading Business Practices Policy

Answer

TikTok's Misleading Business Practices Policy prohibits ads for pyramid schemes, deceptive recruitment tactics, and certain MLM structures.

Question 2

What is a 'Data Processing Agreement' (DPA) and when is it required in social media advertising?

Accepted Answer

A legal agreement required when a business shares personal data with a third-party processor like a social platform

Answer

Under GDPR and similar laws, a DPA is legally required when a data controller (advertiser) shares personal data with a processor (e.g., Meta, Google) for ad targeting.

Question 3

What is the primary purpose of LinkedIn's 'Thought Leader Ads' compliance requirement for sponsored content?

Accepted Answer

To verify that boosted individual posts are clearly labeled as sponsored

Answer

LinkedIn requires that Thought Leader Ads — where brands boost individual employees' posts — be clearly labeled as sponsored content to maintain transparency.

Question 4

Under FTC regulations, which type of social media contest mechanic is most likely to require specific legal disclosures?

Accepted Answer

A sweepstakes requiring users to follow and share the post to enter

Answer

Sweepstakes requiring social actions to enter must include official rules, odds disclosure, and no purchase necessary language under FTC and state lottery laws.

Question 5

Which regulation governs how financial services companies must archive and retain social media advertising content?

Accepted Answer

SEC Rule 17a-4 and FINRA Rule 4511

Answer

SEC Rule 17a-4 and FINRA Rule 4511 require broker-dealers and investment advisers to retain all business communications, including social media ads, for defined periods.

Social Media Advertising Practice Test

Social Media Advertising Practice Test

Social Media Advertising Regulatory Frameworks & Compliance 5